T2DM progresses from compensated insulin resistance to beta cell failure resulting in uncompensated hyperglycemia, a process replicated in the Zucker diabetic fatty (ZDF) rat. our findings reported last year (Nature Medicine 19:1132, 2013) implicate pro-inflammatory macrophages infiltrating pancreatic islets in a paracrine mechanism of beta cell loss, and identify macrophage-expressed CB1 receptors as a therapeutic target in T2DM. ZDF rats also display pronounced diabetic nephropathy, and we have explored the possible pathogenic role of the EC/CB1 receptor system. Diabetic nephropathy is a major cause of end-stage kidney disease, and over-activity of the endocannabinoid/cannabinoid 1 receptor (CB1R) system contributes to diabetes and its complications. Zucker diabetic fatty (ZDF) rats develop type-2 diabetic nephropathy with albuminuria, glycosuria, reduced glomerular filtration, activation of the renin-angiotensin system (RAS), oxidative/nitrative stress, podocyte loss and increased CB1R expression in glomeruli. Peripheral CB1R blockade initiated in the prediabetic stage prevented these changes or reversed them when animals with fully developed diabetic nephropathy were treated. Clodronate-mediated macrophage depletion, which was earlier reported to prevent &#946;-cell loss and hyperglycemia in ZDF rats, did not affect the development of nephropathy. On the other hand, treatment of diabetic ZDF rats with losartan, an angiotensin II receptor-1 (Agtr1) antagonist, attenuated the development of nephropathy and downregulated renal cortical CB1R expression, without affecting the marked hyperglycemia. In cultured human podocytes, CB1R and desmin gene expression were increased while podocin and nephrin content were decreased by either the CB1R agonist arachydonoyl-2-chloroethylamide, angiotensin II or high glucose, and the effects of all three were antagonized by CB1R blockade, siRNA-mediated knockdown of CNR1 or Agtr1 antagonism by losartan. We conclude that increased CB1R signaling in podocytes contributes to the development of diabetic nephropathy and represents a common pathway through which both hyperglycemia and increased RAS activity exert their deleterious effects, highlighting the therapeutic potential of peripheral CB1R blockade. This study has been completed and published during this review period in PNAS. Hepatocellular carcinoma (HCC), the most common form of liver cancer, has high mortality and no adequate treatment. Endocannabinoids are lipid mediators that interact with hepatic CB1 receptors (CB1R) to promote hepatocyte proliferation in the early stages of liver regeneration via inducing cell cycle proteins involved in mitotic progression, including FOXM1 (PNAS 108:6323, 2011). Because FOXM1 is also highly expressed in HCC and contributes to its genesis and progression, we analyzed the involvement of the endocannabinoid/CB1R system in mice with diethylnitrosamine (DEN)-induced HCC as well as in human HCC. Postnatal DEN-treatment induced HCC within 8 months in wild-type mice, with the size of tumors being significantly lower in CB1R-/- mice or in wild-type mice treated with the peripherally restricted CB1R antagonist JD5037. Tumor-induced, CB1R-mediated changes in hepatic gene expression were identified by transcriptome analysis of normal and cancerous tissue from individuals with HCC and from wild-type and CB1R-/- mice, and further confirmed by real-time PCR and functional assays. The hepatic expression of CB1R and its endogenous ligand anandamide is increased in both human and murine HCC. Among the genes prominently induced in HCC in a CB1R-dependent manner are FOXM1 and a number of its downstream targets, including the tryptophan catalyzing enzyme indoleamine 2,3-dioxygenase (IDO2). The observed increased expression and activity of IDO2 in cancerous versus normal liver tissue and the consequent induction of immunosuppressive Treg cells and upregulation of tumor-rrelated angiogenesis contribute to immune tolerance to the tumor. All these changes were attenuated by pharmacological inhibition or genetic ablation of CB1R, which points to the therapeutic potential of peripheral CB1R blockade in the treatment of HCC. These findings have been finalized and published in Hepatology during the current review period. During this review period we have developed novel, dual-target compounds for the treatment of various pathologies associated with fibrosis. These compounds are non brain-penetrant CB1 receptor antagonists and also act as inhibitors of inducible NO synthase (iNOS). In two rodent models of liver fibrosis (bile-duct ligation and CCl4-induced), the dual inhibitors had superior antifibrotic activity compared to single target CB1 receptor antagonists. A patent application has been filed (PCT/US2013/069686) and a manuscript has been submitted for publication. A recent study from the company Roche indicated that 6-Alkoxy-5-aryl-3-pyridincarboxamides, including the brain penetrant compound 14g and its peripherally restricted analog 14h, are selective, high affinity antagonists of the human cannabinoid receptor-1 (hCB1R)(J. Med. Chem. 56, 9874-96, 2013). Using a rat model of diet-induced obesity, they found that only the brain-penetrant analog caused a reduction in body weight, making the authors conclude that the antiobesity effects of CB1 blockade are mediated via CB1 receptors in the brain. In trying to replicate these findings, our ligand binding analyses unexpectedly revealed two orders of magnitude lower affinity of these compounds for mouse and rat versus human CB1R, whereas the affinity of the reference compound rimonabant was comparable to all three CB1Rs. Modeling of ligand binding to CB1R and binding assays with native and mutant (Ile105Met) hCB1Rs indicated that the Ile105 to Met mutation in rodent CB1Rs accounts for the strikingly species-dependent affinity of 14g and 14h. Our work identifies Ile105 as a new pharmacophore for developing better hCB1R antagonists. It also invalidates rodent models for assessing the antiobesity efficacy of 14g and 14h as well as conclusions regarding their peripheral or central site of action based on findings in rodents. These results have been published in Molecular Pharmacology